UPS appeals EU's merger ruling

Tuesday, April 09, 2013

UPS is appealing the European Union's decision to block its proposed merger with TNT Express because the ruling was not legally sound and contained fact errors, according to a report by Reuters.
The integrator, which was trying to buy TNT Express for $6.6 billion, sent its appeal last week.
In January, the European Union officially blocked the proposed merger between UPS and TNT, a decision that had been developing in private and in the press for quite some time. In its ruling, the commission said the deal would reduce the number of small-package players in a host of member states, with DHL being the only non-UPS option in some areas, leading more easily to price increases. Even with UPS agreeing to sell off parts of TNT in the countries at question, the commission found it was not enough to save the merger. FedEx, it reasoned, doesn't have a strong enough foothold in Europe to present a third option for shippers. TNT Express has released a statement saying the appeal by UPS isn't a reconsideration or a renewal of the previous merger offer. Officials reiterated that TNT withdrew the offer in January and will focus on its new profit improvement plan released on March 25.
TNT's new chief executive officer, Tex Gunning, will take up the mantle June 1 and will oversee the development of the company's new strategy, which calls for 4,000 job cuts and $283 million in savings by 2015. The company has already taken the first steps in the new program, unloading its domestic interests in Brazil and China. The company sold Chinese company TNT Hoau to private equity funds under the management of CITIC PE at the end last month for an undisclosed amount.
TNT Express will hold its annual meeting of shareholders Wednesday in Amsterdam. - Jon Ross